Parkland board members OK budget, but can they stick to it?

Parkland Memorial Hospital’s board has approved a $1.27 billion budget for fiscal 2014 that includes deep cuts to overtime and contract labor.

The hospital's Board of Managers on Wednesday approved the spending plan, which includes a half-cent tax increase that would raise the property tax rate by 3.8 percent to 27.6 cents per $100 of appraised value. Dallas County commissioners will get the final vote on the county hospital's budget and tax rate next month.

The hardest part of the budget just might be sticking to it, board member Eddie Reeves said.

"The big question with this budget is, can we hold to this and do what is right by our patients," Reeves said.

Ted Shaw, the hospital’s interim chief financial officer, said it was a difficult budget to balance. Last year's spending plan budgeted for a $6 million loss, and it looks like the tax-supported not-for-profit hospital will actually lose $20 million this year, Shaw said.

"We have reductions in outpatient rates affecting Medicare and Medicaid and we have sequestration," among other factors affecting hospital income, Shaw said.

Then, there's the spending side. Parkland has been under the gun to improve patient safety or suffer a complete loss of Medicare and Medicare funding, which brings the hospital hundreds of millions of dollars annually even after reimbursements nationwide have been continually scaled down.

The hospital until last month has been operating under a federal plan that required costly improvements and consultants.

One goal is to staff at appropriate levels so Parkland will spend less on overtime and contract labor. The hospital is on track to spend $30 million on contract labor and overtime this year. Next year the total amount is budgeted at $17 million.

Shaw and others preparing the budget cut overtime requests by $9 million and contract labor by $8 million.

Parkland had a 15 percent vacancy rate a year ago, causing the hospital to rack up millions of dollars in unbudgeted overtime and temporary staffing costs. Nurse staffing levels were especially low.

The federal government ordered the hospital to staff up after state and federal inspections more than two years ago revealed severe nursing and other staff shortages were one of many factors causing inferior patient care.

Since October 2012, Parkland has hired 2,800 people. Factoring in departures, the hospital's headcount has grown by 717 during the 10-month period, from 8,492 to 9,199 employees.

The 2014 budget includes 2 percent merit raises for employees, but no incentive pay, which is something the Parkland board has pushed for.

“There’s not a nickel of incentive compensation in this budget,” Shaw said. “I want to make that clear.”